Dan Primack

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Flashback: Ireland as a fiscal beacon

November 22, 2010: 12:22 PM ET

Ireland is today's financial pariah, but it wasn't always that way.

During his first presidential debate with Barack Obama in 2008, John McCain suggested that America should be following the Irish example when it comes to taxes:

Right now, the United States of American business pays the second-highest business taxes in the world, 35%. Ireland pays 11%.

Now, if you're a business person, and you can locate any place in the world, then, obviously, if you go to the country where it's 11% tax versus 35%, you're going to be able to create jobs, increase your business, make more investment, et cetera.

I want to cut that business tax. I want to cut it so that businesses will remain in -- in the United States of America and create jobs.

First, McCain got his facts wrong: Irish corporations pay 12.5%, not 11%. Second, the country is in deep, deep trouble.

Ireland considers the corporate tax rate to be a cornerstone of its economic well-being, but today that's like saying that the Vikings consider Brett Favre to be a cornerstone of this year's Super Bowl hopes. Many other European nations have long believed the Irish rate to be predatory -- not so sure Ireland would disagree, actually, since that's the point -- and apparently are asking that it be reconsidered as part of any rescue plan.

Ireland Prime Minister Brian Cowen last night insisted that the corporate tax rate would remain unchanged, but that personal income taxes would be raised to 2006 levels. Of course, Ireland also has been saying for months that it won't need a bailout. So ...

Got to wonder if McCain would like to recall his original message, or if he still considers Ireland to be the beacon of federal tax policy. And, if the latter, I'd assume he also believes that raising personal income taxes are a smart way to deal with staggering budget deficits ...

Watch the presidential debate video (Ireland tax discussion begins at 7:20):

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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